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Dealers offer $48/month phone plans that cost around $90 from major carriers in many provinces

Kijiji in Toronto is crawling with numerous ads for a bargain Koodo or Fido phone plan sold by third-party dealers. (Mike Segar/Reuters)

Pricey cellphone plans in many Canadian provinces appear to be driving consumers toward a booming black market business.

At last search, online ad site Kijiji in Toronto was crawling with advertisements for a bargain Koodo or Fido phone plan — just $48 a month for unlimited Canada-wide calling, texting and a big 5GB data package when you buy through a third party.

Telus actually charges almost double the price — $90 a month — for that Koodo plan in Ontario as well as most provinces.

Rogers' Fido offers the same phone deal for more — $95 a month in most provinces.

But both companies charge only $48 a month for the same cellphone package in Saskatchewan and Manitoba, where the telecoms face more competition.

Kijiji in Toronto is crawling with ads for cheap $48 cellphone plans that should cost close to double that amount with major carriers. (Plans by Joe)

The theory is, somehow these third-party dealers secure the cheaper phone plan out of Saskatchewan or Manitoba and then switch over a customer's phone number from another province.

As compensation, dealers ask for a one-time set-up fee ranging from $40 to $150.

Last year, CBC News brought you a story about the cheap underground cellular industry. At the time, the ads we highlighted had disappeared and telecom Telus said it was looking into the practice.

But almost a year later, advertisements for these $48 plans abound on the internet, targeted at customers outside Manitoba and Saskatchewan. And those involved tell CBC News that business is thriving.

Gary Ng, editor of the tech site iPhone in Canada, believes high cellular service prices in most provinces are helping fuel an underground business.

"Because our Canadian wireless prices are some of the most expensive in the world, some people will always want to find a better deal and they might do whatever it takes to get it," he says.

Plans by Jamie

On Kijiji in Toronto, the deals are offered by many vendors with business names such as "Plans by Joe" or Drew or Tony or Jamie or what have you.

Jamie Walker with Plans by Jamie agreed to speak with CBC News by email. He said he offers both the $48 Fido and Koodo plans to anyone in Canada. His fee is $100.

Jamie Walker in Toronto advertises cheap $48 cellphone plans on Kijiji. These plans cost $90-$95 in Ontario if bought through Fido or Koodo. (Plans by Jamie)

Walker told us that "business is amazing" and that he is "surprised at the amount of people taking advantage of it."

Walker added he doesn't see anything wrong with his operation because he believes that telecoms charge too much. So, he concludes, consumers should "take advantage and save as much as you can where you can."

Walker would not reveal how he arranges the $48 a month deal for people outside of Saskatchewan and Manitoba.

"I don't believe I can share the method," he said.

Plans by Drew and Tony

Drew with Plans by Drew also boasts business is good with "hundreds of satisfied customers."

He has even set up a slick website, openly advertising his offer: a $48 a month Koodo deal to customers in Ontario, Alberta and B.C.

Drew declined to comment to CBC News. But his website gives some insight into how his deals work. He instructs customers to purchase a month-to-month Koodo plan then provide him with the details.

He explains that he will "change your plan to the $48 5GB plan" all for a one-time fee of $40.

"Plans by Tony," also appears to have a thriving business. Tony advertises the $48 Koodo deal for a $100 fee.

Tony boldly promotes his business on Twitter, Facebook, Kijiji, and a sophisticated website where he calls his company "The Cell Phone Man."

In an email to CBC News, Tony told us that most of his customers are in Toronto, followed by Vancouver, Alberta and then Nova Scotia.

He said business is good because he provides customer satisfaction and great phone deals. "There's absolutely no reason for plan prices to be this outrageous in this day and age," he added.

Tony told CBC News he objects to the term "black market" to describe his business. He claims he works indirectly for Telus and that his plans don't originate in Manitoba or Saskatchewan.

According to Tony, he's able to offer customers outside those provinces special unadvertised deals.

Telecoms talk back

CBC News asked Koodo owner Telus if it has taken any action against these businesses. "Purchasing plans via a third party is risky, and we are taking several steps to prevent it," replied spokeswoman Luiza Staniec in an email.

Fido owner Rogers also sent out a warning. "Customers should use caution when exploring plans online that aren't being offered directly through one of our official channels," said spokesman Andrew Garas.

About the Author

Sophia Harris has worked as a CBC video journalist across the country, covering everything from the start of the annual lobster fishery in Yarmouth, N.S., to farming in Saskatchewan. She now has found a good home at the business unit in Toronto. Contact: sophia.harris@cbc.ca

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